His 17 months in office have in fact been an exercise in futility for the art-of-the-deal president.
- No deal on immigration.
- No deal on health care.
- No deal on gun control.
- No deal on spending cuts.
- No deal on Nafta.
- No deal on China trade.
- No deal on steel and aluminum imports.
- No deal on Middle East peace.
- No deal on the Qatar blockade.
- No deal on Syria.
- No deal on Russia.
- No deal on Iran.
- No deal on climate change.
- No deal on Pacific trade.
.. Even routine deals sometimes elude Mr. Trump, or he chooses to blow them up.
.. “Trump is an anarchist,” said Jack O’Donnell, a former president of the Trump Plaza Hotel and Casino, who became a sharp critic. “It was his approach in business, it is his approach as president. It does not take good negotiating skills to cause chaos. Will this ever lead to concessions? Maybe, but concessions to what? Not anything that resembles a deal. I just do not see him getting much done.”
.. I don’t think it’s that counterintuitive to say that playing hardball will lead to better trade deals eventually,” said Andy Surabian, a Republican strategist and former aide to Mr. Trump.
.. We’ll see what the final outcome is, but it’s already a success just to get them to the table.”
.. the major tax-cutting package that passed late last year. But even that was negotiated mainly by Republican lawmakers, who said Mr. Trump did not seem engaged in the details.
.. And as legislative challenges go, handing out tax cuts without paying for them is not exactly the hardest thing that politicians do.
.. In effect, the agreement with Mr. Kim is like a deal to sell parts of Trump Tower without settling on a price, date, inspection or financing. It is not nearly as advanced as agreements that President Bill Clinton and Mr. Bush made with North Korea, both of which ultimately collapsed.
.. But no modern president has sold himself on the promise of negotiating skills more than Mr. Trump has. He regularly boasts that deals will be “easy” and “quick” and the best ever.
.. He has pulled out of Mr. Obama’s Iran nuclear deal, Paris climate accord and Trans-Pacific Partnership, but promises to negotiate better versions of those deal have gone nowhere.
.. Mr. Trump set his sights on what he called “the ultimate deal,” meaning peace between the Israelis and Palestinians. He said it was “frankly maybe not as difficult as people have thought.” A year later, his team is only now preparing to release a plan.
.. “What the president seemingly fails to understand is that in foreign policy and in trade policy — unlike in real estate transactions — the parties are all repeat players,”
.. “The country you insult or seek undue advantage over today you will have to work with again tomorrow.”
.. Mr. Trump’s approach so far has been to make expansive demands and apply as much pressure as he can. He argues that crushing sanctions he imposed on North Korea forced Mr. Kim to meet. He now hopes to extract concessions from China, Canada and Europe after slapping punishing tariffs on them.
.. “Trump is a bilateral player, in part because that’s what he is used to from his building days, but also because he keeps himself the king, the decider, the strongman,” said Wendy Sherman, who was Mr. Obama’s lead negotiator on the Iran nuclear deal. “In the case of North Korea, however, he wouldn’t have gotten this far — which isn’t all that far — without the South Koreans or the Chinese.”
.. When he gave up on immigration on Friday, he blamed it on Senate Democrats, even though the immediate impasse was among House Republicans who do not need the other party to pass a bill.
.. “Republicans should stop wasting their time on Immigration until after we elect more Senators and Congressmen/women in November,”
.. It was in effect an acknowledgment by Mr. Trump that he cannot reach across the aisle and can only govern with Republicans.
.. the challenge on immigration is that the president has to grapple not just with Democrats but also with Republicans who do not share his philosophy on the issue.
.. Mr. O’Donnell, the former casino president, said Mr. Trump has always oversold his deal-making skills. The casino he managed, Mr. O’Donnell noted, brought in $100 million a year yet still went bankrupt.
.. “The fact is, Trump casinos should have been one of the greatest success stories in the history of casino gambling, but bad deal making caused him to lose all three properties,” he said.
February 2016, I warned in an article co-written with economist Benn Steil that “a Trump presidency threatens the post-World War II liberal international order that American presidents of both parties have so laboriously built up — an order based on free trade and alliances with other democracies. His policies would not make America ‘great.’ Just the opposite. A Trump presidency would represent the death knell of America as a great power.”
.. In just the past few weeks, he has taken a giant step toward destroying the global system that the United States created after 1945.
.. Trump has now exited three major treaties — the Trans-Pacific Partnership, the Paris climate accord and the Iran nuclear accord — and thrown into doubt the future of another — the North American Free Trade Agreement — while launching a reckless trade war against our closest allies.
.. Trump continued to push his irrational idée fixe that the United States — the richest nation in the world — has been victimized by its friends.
.. Trump looks like a defendant who has just been found guilty by a jury of his peers.
.. Justin Trudeau did not mince words, calling the U.S. tariffs “insulting” and saying: “Canadians, we’re polite, we’re reasonable, but we also will not be pushed around.”
.. No U.S. officials have ever spoken this way about any U.S. ally, ever. These are the kind of words that normally precede military action.
.. Trump seems amazed to discover that the European Union (gross domestic product: $17.1 trillion), Japan ($4.8 trillion), and Canada ($1.6 trillion) — which together produce more than the United States ($19.3 trillion) — will not be pushed around as easily as the contractors he has gotten used to stiffing.
.. add Russia. This was a bizarre suggestion, given that Russia is not only an international outlaw but also an economic pygmy whose GDP does not even rank in the top 10.
.. If the G-7 were to expand, it should include India and Brazil, both democracies that have larger economiesthan Russia’s.
.. invasion of Ukraine — an act of aggression for which Trump perversely blames President Barack Obama — and it has done nothing since 2014 to deserve readmittance. Instead, its meddling in U.S. elections its and war crimes in Syria demand more punishment.
.. Trump is doing precisely what Putin hoped would happen when he helped Trump get elected.
.. A new poll finds that only 14 percent of Germans consider the United States a reliable partner, compared with 36 percent for Russia and 43 percent for China. That the citizens of one of America’s staunchest and most important allies now look more favorably upon our illiberal foes is a testament to Trump’s unrivaled wrecking abilities.
.. none of those disputes called into question the fundamental unity of the West in the way that Trump’s stupid and self-destructive actions do. The Atlantic alliance was born in Canada in 1941 and may well have died there in 2018.
In the second year of his presidency, Donald Trump has doubled down on his “America First” brand of economic nationalism, by making impossible demands of US allies and escalating a multi-front trade war of his own making. In doing so, however, he has all but guaranteed that Americans themselves will bear the costs.President Donald Trump may fancy himself a builder, but when it comes to international treaties and norms, he has proved to be a one-man wrecking crew. And now, the chaos appears to be spreading and deepening.
.. THE TRUTH ABOUT NAFTA
For decades after World War II, Mexico pursued many of the same disastrous economic policies as other developing countries. It maintained high protectionist barriers for manufactured goods, and relied heavily on commodity exports, particularly oil. As a result, it experienced recurrent stop-go cycles, whereby accelerating inflation and ballooning balance-of-payments deficits would force a round of austerity, only for the process to repeat itself after increases in commodity prices, but at a slower rate of growth each time. Not surprisingly, the growth rate during these years waxed and waned dramatically, and by the start of 1989, Mexico’s per capita income was around $2,393 – about 11% that of the US.
.. at the time, the average US tariff on manufactured imports was around 2%, while Mexico’s average tariff on US exports was around 10%. It was clear from the start that the US would gain more from improved access to the Mexican market than vice versa.
.. Ross Perot famously warned that an FTA with Mexico would result in “a giant sucking sound going south.” Of course, nothing of the sort happened.
NAFTA entered into force on January 1, 1994, and between 1993 and 2000, US unemployment fell from 6.9% to 4%. Today, it stands at 3.8% – its lowest point in almost two decades.
.. Some of the demands directed at Mexico, in particular, are so outrageous that no country could ever accept them. Others, such as the US proposal for more stringent rules of origin (which require that a certain percentage of an imported article be fabricated within the NAFTA trade bloc), are very problematic, but a compromise can probably be reached.
.. One of the US’s most disruptive tactics has been to demand that Mexico bring its auto workers’ pay up to the level of their US counterparts. The minimum wage in Mexico is currently around $4 per day, and around $6 per day in manufacturing industries. But the wage floor US negotiators have reportedly demanded is $16 per hour – 21 times the average wage in Mexican manufacturing.
.. it is inconceivable that the Mexican electorate would stand for one segment of workers earning $128 per day while everyone else still earned an average of $4-6 per day.
.. the Trump administration’s demand is so absurd that even the US auto industry opposes it , not least for what it would do to US producers’ value chain.
.. Another impossible US demand, which would affect Canada as much as Mexico, is a sunset clause that would force each government to renew the renegotiated NAFTA every five years. The fact that the entire deal could potentially expire every five years would create a permanent state of uncertainty
.. The Trump administration has justified the tariffs on national-security grounds, which makes absolutely no sense when one considers that US allies are bearing the brunt of the costs.
.. The Trump administration’s approach to both allies and adversaries represents the worst kind of “managed trade,” which the US and other countries with market-based economies have long condemned.
South Korea did not achieve strong, sustained growth until it liberalized its trade and other economic policies, starting around 1960, with the encouragement of the US.
.. South Korea must now create an administrative apparatus to limit its steel producers’ exports to the US. That means tracking 52 different categories of steel to ensure that exports remain at or below 70% of their 2014-2017 levels.
.. there is a need to monitor and regulate the inflow of steel and aluminum, whether by the US, South Korea, or both. For the US, expanding its own customs service to perform this task would carry enormous administrative costs
.. the new dispensation will likely lead to all manner of influence peddling as firms try to win scarce licenses from customs officials
.. by protecting domestic producers, the Trump administration is raising steel and aluminum prices within the US, while reducing them in the rest of the world. In essence, Trump is conceding even more cost advantages to non-US producers, for no good reason.
.. After World War II, the US led the way in establishing a rules-based trading system, first with the General Agreement on Trade and Tariffs, and then with its successor, the World Trade Organization. The past 73 years have shown that when there are legitimate grievances between trading partners on issues such as high-tech secrets, bilateral efforts to resolve them often prove ineffective, whereas action taken through the WTO has a strong track record. Unless and until the Trump administration recognizes this fact, Americans themselves will bear the costs of its disastrous trade policies.
By keeping trading partners guessing, the president has sought to create leverage in trade negotiations, including in talks over the North American Free Trade Agreement with Mexico and Canada. But in the process, he has sowed an atmosphere of chaos among allies as well as manufacturers uncertain about the ultimate impact on their vast supply chains.
.. Prime Minister Justin Trudeau of Canada said it was “inconceivable” that Canada “could be considered a national security threat.”
.. “For the first time in generations, we’ve really thrown out the rule book with our best trading partners,” said Rufus Yerxa, the president of the National Foreign Trade Council, which represents some of the largest exporters in the United States. “We can’t expect them to continue business as usual with us if we are throwing out the rules. So that means everything from airplanes to agriculture is on the chopping block.”.. But Vice President Mike Pence on Tuesday phoned to tell the Canadian prime minister that the precondition of a deal was a sunset clause, meaning the pact would automatically expire unless the three countries voted to continue it. The idea has drawn ire from both foreign leaders and business executives, who say it undercuts the surety that trade agreements are meant to create.“I had to highlight that there was no possibility of any Canadian prime minister signing a Nafta deal that included a five-year sunset clause,” said Mr. Trudeau, “and obviously the visit didn’t happen.”.. Germany, in particular, had pressed for a negotiated solution, but officials there grew wary after Mr. Trump announced that he would begin a separate trade investigation into automotive imports. If car tariffs go into effect, they would especially hurt Germany’s economy... The Trump administration has argued that imports have weakened the country’s industrial base, and, by extension, its ability to produce tanks, weapons and armored vehicles. “We take the view that without a strong economy, you can’t have strong national security,” the commerce secretary, Wilbur Ross, said Thursday... The European Union and Canada have objected strongly to the idea that they pose any kind of threat to national security, citing their close alliances and defense agreements with the United States... Canada announced corresponding tariffs on a broad list of American exports, including steel and aluminum, as well as dozens of basic consumer products like ketchup, insecticides and laundry machines. The Canadian tariffs, which go into effect July 1,.. The United Steelworkers union, which represents members in Canada as well as the United States, said the decision called “into serious question” the design and direction of the administration’s trade strategy.
.. The Aluminum Association, the industry trade group, also said it was disappointed. Heidi Brock, the group’s president, said the tariffs would do little to address the larger issue of overcapacity in China “while potentially alienating allies and disrupting supply chains that more than 97 percent of U.S. aluminum industry jobs rely upon.”
.. “These tariffs are hitting the wrong target,” said Representative Kevin Brady, Republican of Texas. “When it comes to unfairly traded steel and aluminum, Mexico, Canada and Europe are not the problem — China is.”
.. In a more pointed statement, Senator Ben Sasse, Republican of Nebraska, called the tariffs “dumb.”
“Europe, Canada and Mexico are not China, and you don’t treat allies the same way you treat opponents,” he said.
in the event Nafta was terminated—as Mr. Trump has threatened to do—and there is a reversion to tariff rates under World Trade Organization rules, Canadian economic output could be reduced by 0.4% over the next four to five years, and “by even more if nontariff trade costs increase.”
.. deep U.S. cuts to corporate tax rates pose another “considerable uncertainty” on the Canadian economy, warning the combination of lower U.S. taxes and trade uncertainty could make Canada a less attractive destination for investment.
.. trade uncertainty is prompting some Canadian firms to delay decisions on business investment, while other companies are opting to hedge bets and expand outside of Canada. “We expect business investment to increase, but not by as much as it could without this uncertainty,”
In tweets, the president brings trade deal into play over annual protest that has caught his attention
President Donald Trump on Tuesday warned that the North American Free Trade Agreement was “in play” and threatened to end aid to Honduras and other Central American countries if an organized protest march of 1,000 asylum seekers traveling through Mexico reaches the U.S. border.
.. “Cash cow NAFTA is in play, as is foreign aid to Honduras and the countries that allow this to happen. Congress MUST ACT NOW!”
.. The “caravan of people” Mr. Trump attacked Tuesday is an annual event that leaders say aims to raise awareness about the tens of thousands of Central Americans who, facing gang violence and political unrest in one of the world’s most violent areas, flee every year to Mexico or the U.S. Many are turned back, extorted or kidnapped along the way.
.. Mexican Foreign Minister Luis Videgaray responded to Mr. Trump’s comment Sunday with a tweet of his own denying that his government was doing nothing to control migration. “Every day Mexico and the U.S. work together on migration throughout the region. Facts clearly reflect this,” he said. “Upholding human dignity and rights is not at odds with the rule of law.”
.. Mexican and U.S. officials, facing national elections this year, have pressed for a relatively quick deal on Nafta, while their Canadian counterparts have held out for an agreement that would preserve key structures from the existing Nafta, including a dispute-settlement system that can challenge tariffs levied by the Trump administration.
.. Mr. Trump’s threat to cut aid to Honduras is one of a series of such warnings he has issued in the first 14 months of his administration, on which he hasn’t always followed through.
The U.S. plans to send $65.8 million in aid to Honduras in fiscal year 2019, according to the State Department, though none of those funds have yet been obligated or spent.
.. I mean seriously, when you see what’s happening you look — we’re renegotiating NAFTA right now. I don’t know that we can make it good.
I tell people openly, because the best deal is to terminate it and then make a new deal. But I don’t know that we can make a deal because Mexico is so spoiled with this horrible deal that they’ve lived with, from our standpoint horrible.
So think of it, Mexico makes more than a hundred billion dollars a year on the United States. Now, how stupid is this.
But sometimes something is so good that you can’t — how do you? The best way? Terminate, let’s start all over again. Let’s start all over again. But some of the politicians are afraid to terminate, oh, we don’t want to terminate NAFTA. Take a look at these empty mills all over the place, that they turn into nursing homes, you know. Nice solid walls on the outside. But, it’s — it just can’t be.
I really think we’re making the point a lot of people are digging it. I will tell you, the people that really count, which is you, the workers, everybody, they’re really understanding what’s going on. Nobody’s done what I’m doing. I mean it’s sort of really virgin territory.
It’s absolutely virgin territory. It’s territory that our country for 50 or 60 or 70 years has not wanted to go there. They just haven’t for whatever reason.
And our wealth has been taken, our jobs have been taken, our companies have moved, and now they’re starting to move back. So it’s, it’s a formula that is, it’s just absolute — there’s disruption, there’s anger. And just remember, our friends that everybody says — our allies, our allies are wonderful — I love our allies. Our allies care about themselves, they don’t care about us. You look at our trade deficit with these countries are our allies. It’s unbelievable. And they understand it. I don’t blame them.
I told Japan — so we lose 100 billion dollars a year with Japan — 100 billion. So why aren’t we taxing their cars when they come in. Then we’d lose nothing. We might even make something. And you know what they’re going to do, they’re going to say we don’t want to pay that tax, so let’s build plants in the United States. They already have some. But they’ll expand them and they’ll build new plants. Because they don’t want to pay the tax — I want them to build new plants in the United States. Let them make United States here — like China makes them do, we have a company, they want to build planes over there, hate to say it, Boeing is being forced to build plants. I don’t like that, I don’t like it, so I’m not saying China’s wrong. I was with President Xi, I was with a big group of people, and I was saying how China is ripping off the United States. And he’s like “woo, this is uncomfortable.” [Laughter.] 700 press. I’m saying China is ripping off our — but I don’t blame you. I say, it’s great that you were able to do it for yourselves. I blame the people that represented our country, because they were not doing their job — they were delinquent in allowing this to happen to us. So we owe 21 trillion dollars. We lose 800 billion a year.
Josh will say, I don’t think I’m going to ruin [unintelligible.] Think of it, Josh. We lose 800 billion a year on trade. Who made these deals? Who made these deals?
Then you have certain people that think it’s okay to lose 800. You know, these worldly people. You know why they’re worldly people, because they have stuff on the other side. [Laughter.] That’s what it is. Can’t be any other reason. But we lose 800 billion dollars a year on trade. We lose our jobs, we lose everything.
And it’s not happening anymore, because it’s starting to come back. But over the next few months, you’re going to find it even more interesting. Because things are really — you know, we have, statutorily you have to do this, this, this, wait 90 days, wait six months, you can’t do it, you’re not allowed to legally. We have agreements that are so bad.
We have one agreement with a trade. I said when does that agreement terminate, it’s terrible. Sir, there is no termination. I said, what do you mean? We don’t have the right to term — I said, well, okay, after 10 years, 20 years. No sir, there is no right of term — I said what the hell kind of — So you know what I did, I just terminated. [Applause.]
Which would mean that’s, we’ll call it unconstitutional. There’s no end date. There’s no nothing. I’ll give you another example, Mexico, so they have this great deal. The day it was signed, it was a bad deal, because they have a 16 percent VAT tax, and we don’t. So they were already up 16 percent before the deal. And nobody saw that. And by the time they realized it, the deal was gone. But instead of adjusting the deal — what was that, 30 years ago when it was first signed — instead of adjusting the deal, we lived with it. What the hell difference does it make?
So they had a 16 percent step up advantage on us, and they have for many years. And Mexico and Canada — and, by the way, Canada, they negotiate tougher than Mexico. Trudeau came to see me, he’s a good guy, Justin. He said, no, no, we have no trade deficit with you, we have none. Donald, please. Nice guy, good-looking, comes in — Donald, we have no trade deficit — he was very proud, because everybody else you know were getting killed with our, so he’s [unintelligible]. I said wrong, Justin, you do. I didn’t even know. Josh, I had no idea. I just said, you’re wrong. You know why? Because we’re so stupid. [Unintelligible, laughter] And I thought they were smart.
I said you’re wrong, Justin. He said, Nope, we have no trade deficit. I said, Well, in that case, I feel differently, I said, but I don’t believe it. I sent one of our guys out, his guy, my guy, they went out, I said, Check, because I can’t believe it.
.. Well sir you’re actually right. We have no deficit, but that doesn’t include energy and timber. But when you do we lose 17 billion dollars a year. It’s incredible. So you’re in good hands. And I need Josh to help [unintelligible]. [Applause.]
Claire McCaskill is a guaranteed negative vote on every single thing that you people stand for, and frankly that a vast majority of the people of Missouri stand for. It is a negative vote for our country. And you have to defeat Claire McCaskill. Last time she get very lucky. She got lucky — she was going to lose. That was a done deal. And then, something happened. I was watching, I said, oh! What happened. That was big! The next day I said, oh yeah, I was right, I watched that.
So you got to get her out. Bad for Missouri, bad for the country. And this is going to be a great United States senator. Thank you very much. [Applause.]